Pound Falls Amid Risk Aversion
(RTTNews) - The pound was lower against its most major counterparts in the European session on Friday, as risk sentiment soured due to the prospect of further policy tightening by the U.S. Federal Reserve.
An overnight spike in U.S. Treasury yields raised fears of a looming recession.
Recent comments from a slew of Fed officials suggested that interest rates would keep climbing for some time to cool inflation.
Data from the Office for National Statistics showed that the UK economy avoided a recession in the fourth quarter.
Gross domestic product held steady in the final quarter of 2022, as expected, after shrinking 0.2 percent in the third quarter. The pound dropped to 1.1150 against the franc and 0.8872 against the euro, off its prior highs of 1.1179 and 0.8848, respectively. The pound is seen finding support around 1.105 against the franc and 0.90 against the euro.
The pound fell to a 2-day low of 157.76 against the yen, retreating from an early 4-day high of 159.63. On the downside, 154.00 is possibly seen as its next support level.
In contrast, the pound climbed against the greenback, with the pair trading at 1.2123. Next likely resistance for the currency is seen around the 1.24 level.
Looking ahead, University of Michigan's preliminary U.S. consumer sentiment index for February is due out in the New York session.
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